EM.TV's plan to sell a minority stake of Muppet-maker Jim Henson Co. to a group led by former TV executive Dean Valentine hangs on a number of tenuous financing elements that could delay or undo the deal, people familiar with the matter said on Friday.

The Henson saga has dragged out for more than a decade since the death of founder Jim Henson in 1990. Walt Disney Co. promptly abandoned plans at the time to buy the company that created beloved Muppets Kermit the Frog and Miss Piggy and "Sesame Street" characters such as Big Bird.

Embattled German children's programmer EM.TV, which paid the Henson family $680 million for the business in 2000, has been seeking a buyer for more than a year.

Venture capitalist Thomas Unterman, chief executive of Los Angeles-based investment firm Rustic Canyon Group, has been brought in to help finance Valentine's bid with Europlay Capital Advisors, people familiar with the matter say.

Munich-based EM.TV said on Tuesday it had signed a letter of intent with Valentine's group to sell 49.9 percent of Henson's characters and programming library in a deal expected to close in January. Negotiations are proceeding in New York, sources say.

EM.TV is still shopping Henson's special effects business, known as the Creature Shop, sources said.

The deal with Valentine hinges on raising enough money for EM.TV to cover a looming $64 million debt payment. Valentine's group has offered about $30 million for the Henson stake, people familiar with the matter say.

To make up the rest, EM.TV would need to monetize the $70 million owed by Sesame Workshop over the next eight years. Sesame bought its "Sesame Street" characters -- such as Big Bird and Cookie Monster -- from Henson for $180 million last year, paying about $110 million up front.

Sesame Workshop is eager to buy out the debt to save on costly interest charges, but only will do so under favorable terms, sources say. The debt, which is not secured by any Sesame asset, could fetch about $35 million, bankers estimated.

Sesame recently raised money to pay for the deal with Henson by selling its half-stake in children's network Noggin to partner Nickelodeon, which is a unit of media giant Viacom Inc.

EM.TV's loan was scheduled to come due at year's end, but lenders have granted a short extension.

Representatives for Henson, Sesame, Valentine, Unterman and EM.TV could not be reached.

People familiar with the matter said EM.TV has continued talks with other bidders, some of whom also have signed letters of intent, in case Valentine's financing falls through.

Valentine is the former chief executive of United Paramount Network, and he previously ran Disney's Touchstone TV unit. He said he plans to expand the Muppets brand, which has languished under EM.TV. The made-for-TV "It's a Very Merry Muppet Christmas Movie" got strong ratings in November, however.

Disney, which last week had been contemplating a $135 million bid for all of Jim Henson Co., including the Sesame debt, has not decided yet whether to proceed, sources say. Disney officials have declined to comment.

Unterman and his $550 million investment fund, which focuses on technology companies, could provide the added backing Valentine needs. Unterman was one of the key brokers behind the Times Mirror's sale of the Los Angeles Times to Tribune Co. He was chief financial officer at Times Mirror.

In addition to Disney and Valentine, three other groups were bidding or considering offers for all or part of Henson. Sources said London-based Entertainment Rights Plc and Los Angeles-based billionaire investor Haim Saban each have signed letters of intent with EM.TV. Privately held Classic Media also has held talks with Henson.

$30 million - sheesh, thats cheap - but then again looks like the deal doesn't include the 'Creature Shop'. I guess it'll go through, all deals like this hang on 'tenuous financial links' - probably a warning shot from EMTV to make Valentines lot hurry up a bit in time for the debt payment. Then again will Disney come and save the the day at the last minute ? It's like the ending of an episode from 'Batman' !

Thanks for posting this Phil...I think this news wire contains a lot of info a lot of us didnt know. I mean it mentioned Creature Shop and Sesame...hmmm. Ideally I wish ONE company could own everything: JHC, Sesame, Creature Shop, BITBBH, etc.

Originally posted by Luke $30 million - sheesh, thats cheap - but then again looks like the deal doesn't include the 'Creature Shop'.Then again will Disney come and save the the day at the last minute ? It's like the ending of an episode from 'Batman' !

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My fealing's are the same on that one Luke...look tho:

**Disney, which last week had been contemplating a $135 million bid for all of Jim Henson Co., including the Sesame debt, has not decided yet whether to proceed, sources say. Disney officials have declined to comment.

In addition to Disney and Valentine, three other groups were bidding or considering offers for all or part of Henson. Sources said London-based Entertainment Rights Plc and Los Angeles-based billionaire investor Haim Saban each have signed letters of intent with EM.TV. Privately held Classic Media also has held talks with Henson.

None could immediately be reached.**

... so is it just me or IS there still a little hope left for disney(the mouse)???

See, we need to watch and wait. The Muppets have been bounced around so much with proposed deals for over a decade so I won't believe anything until it's in ink, but I still think - even if it's 20 years from now - that Disney will own the Muppets. It's just a matter of time in my eyes. Not that I'm voting for them - I just think it's likely to happen eventually.

man, i knew em.tv was in pretty bad shape but having a 60 million dollar debt is like having a shoot me sign on the company.

i feel sorry for henson. its like someone is cutting into every part of them and dividing each part as their own. i honestly don't like having several groups owning just one company. thats not how companies run.

i know companies have money problems, but why in the heck does em.tv have some much in debt? i guess no one can run companies the way like they used to.

Personally i don't think theres much hope of Disney just yet - i just think if they were gonna, they would have jumped in by now. EMTV are probably looking to sell off everything else and just co-own the Muppets. Diz isn't exactly gonna be ecstatic about that. I agree with Jamie though, maybe someday our prince will come - tra la la !

EM.TV is still shopping Henson's special effects business, known as the Creature Shop, sources said.

Disney, which last week had been contemplating a $135 million bid for all of Jim Henson Co., including the Sesame debt, has not decided yet whether to proceed, sources say. Disney officials have declined to comment.
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What, this whole time the Creature Shop has been separately for sell? Bull...

You know what? I don't care what company buys Henson, if you're selling the Muppets you darn well better sell the Creature Shop aka Jim Henson's Creature Shop with it. I mean it's bad enough the rights to the Sesame characters were sold, but then again they were sold to the company that actually produces the show. To me anyway, if you were to break up the company, it'd make more sense to sell the workshops/characters to one company and the pre-2002 programming rights to another company, sorta like the whole Turner-MGM deal of the late 1980s. Of course, I would much rather see the whole Henson operation--workshops, characters, programming at all--be sold to one company.

And as for that Disney part, what that's supposed to mean? Really, tell me I'm kinda slow.

Originally posted by ryhoyarbie
i feel sorry for henson. its like someone is cutting into every part of them and dividing each part as their own. i honestly don't like having several groups owning just one company. thats not how companies run.

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Because life is 'effed' up. If life was fair: We wouldnt have had Hiroshima, 9/11, the holocaust, African civil wars, war in general, great racial divides, religions that divide people, great strife in the Middle East, AIDs, famine, school bullies, ignorance, Big Tobacco,
kidnappings, drugs, slavery, Oil and Gas worship, etc.

The Muppets are one of the last things that are truly right with this world...and it is a shame that while the giant tentacle Disney not only owns itself but everything from Arizona to Zion...JHC can barely order out for Donuts.

Some dont know this...but the Muppet revolution is truly a global one. It is about unity and hope around the globe, not just American/UK centric folks. Disney only wishes they could do what JHC is doing(and by 'JHC' I mean them, CTW/SW, etc) While Disney is exploiting countless starving familes in factories(If only they had people like Ken personally going down to factories to make sure everything is cool and going great) JHC/CTW is:
Going into war torn Afghanistan developing plans for a Muppet like show for children from Frith and company. They are trying to bring together people in the middle east through joint productions. There is talks of a Northern Ireland show...as well there are countless International Sesame productions now and coming soon. Disney can never lay claim to the sheer delight JHC has brought to people in the last half a century. From Vietnam vets Ive personally talked to who were delighted by the Muppet appearences on the Ed Sullivan show on USO tv during tour of duties...to the recent Kermit and Gonzo appearence at a NY Touys R Us for under privleged kids...Jim Henson's vision burns brighter than the fire of Olympus.

People think Im just some misguided fan...but I know full well
the pen-ultimate goodness that solidifies and unifies us all.
If only the higher ups, execs, and big wigs could lay down their political sparring and realize this.

I'll be ****** if the Muppets will find a fate of obscurity or slow phasing out due to a bad decision. Weve already suffered enough since 1990...and again a decade later with JHC's ill begotten sell to EM.TV. It's time to rise the eff up, and let it be known we want our guys back and bigger than ever. It is what is truly rightous in this world, and while I speak with a fervent zealot tongue...it is because I truly believe it is a right and a given for things to be different than they have been.

It is truly time to til the soil of a new beginning. Maybe EM.TV's 50.1% grasp be lifted, and a true saviour of JHC come forth.
If that is Valentine so be it...but it isnt fair to the fans or to the world what has been going on. I believe new visionary forward thinking leadership and an all out 100% buyout is the only way.

Beaker, that was touching. Hate to say it, but it topped your ode...... That is what the muppets were about, unity. They just had fun along the way! Sure they can be edgy, in some peoples' opinions, but what you said was absolutely correct!

That's how I feel about the Muppets, too. I feel that they're owned by the fans who share the same ideals that Jim Henson did. Watching them juggled, split and fiddled with makes me ill

And I think Disney, for better or worse, will eventually end up owning them. I'd still prefer a strong and COMPLETE buyout by a company that isn't as sickening as Disney, but with half-a**ed partial sales and the danger of the Power Rangers moron owning them.......what else is there

Originally posted by sidcrowe That's how I feel about the Muppets, too. I feel that they're owned by the fans who share the same ideals that Jim Henson did. Watching them juggled, split and fiddled with makes me ill

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So glad others see this too. People can post on here all about shareholders, foriegn companies, corporate snafus.
But the real matter is that they are owned by the fans and the
individuals who make up the JHC family. It's a true shame the media and a lot of folks pass off 'the Muppets' as some nostalgic brand...when clearly there is a global reaching legacy of excellency and dedication that spans half a century.

But for now, all we can do as fans(and Im sure even JHC themselves) is jut sit back and hope for the best. Unfortunately it has come down to a clandestine group of weasaly German
execs that has the ball in their court. All we can do is hope for the best.

Originally posted by beaker But the real matter is that they are owned by the fans and the
individuals who make up the JHC family.

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But Cory, the simple fact is that the family sold them, just signed them away for a paycheck and some shares. I just kinda have trouble getting my head around all this fantasy idealistic stuff you type - it seems Henson's kids don't exactly see them the same way you do. Of course their underlying feelings are that Jim's characters were their fathers creation and llifetimes work and they'd like to see them in good hands but at the same time to sell them they must have seen them as valuable commercial properties too that could be bought and sold as they wished. Lets also not forget that Jim was more than ready to sell up to Disney and just stay on independantly as a creative consultant. I think sometimes you are getting mixed up with the mythical god like Jim creature that the media tried to create after he died (just the same as they did with Princess Diana and the passengers from the 911 plane crash) and the real Jim Henson who was above all a showman and great entertainer.

Originally posted by Luke But Cory, the simple fact is that the family sold them, just signed them away for a paycheck and some shares. I just kinda have trouble getting my head around all this fantasy idealistic stuff you type - it seems Henson's kids don't exactly see them the same way you do. Of course their underlying feelings are that Jim's characters were their fathers creation and llifetimes work and they'd like to see them in good hands but at the same time to sell them they must have seen them as valuable commercial properties too that could be bought and sold as they wished. Lets also not forget that Jim was more than ready to sell up to Disney and just stay on independantly as a creative consultant. I think sometimes you are getting mixed up with the mythical god like Jim creature that the media tried to create after he died (just the same as they did with Princess Diana and the passengers from the 911 plane crash) and the real Jim Henson who was above all a showman and great entertainer.

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Sorry Luke...I have to extremely 180 disagree with you. First of all, about JH...it is his creation and vision that I hold up with a sword in one hand and a decree for a return to glory. No matter if it is JH, or the Dhalai Lama I never make out someone to be more than just a humble person. I think you missed my point...what I stated was that all in all it is the very essense of the Muppets that comes through in all this crazy mess. Its kind of sad hearing you misconstrue what I am saying. I am talking about the very survival of the Muppets and JHC, and make no mistake in trying to over canonize JH himself. I think youre getting confused in what I was trying to convey.

And yes, for whatever reason JHC have made the choices they have. But I beg of you, all of you...to lay down your cynical goggles that have grown for the last decade...my so called "fantasy idealistic stuff" is nothing more than a basic birthright return to where the Muppets should have been all along...and away from this murky mess thats plagued JHC for the past 12 years. If saying we all want nothing more than the Muppets to return to where they should be is "fantasy idealistic stuff" than so be it...but dnying this would be to go against the basic principles and messages of the Muppet Movie and really VMC...in The Muppet Movie the message was fulfilling dreams.

I Wish more folks would realize the huge message of Very Merry Christmas: Bitterman(AKA EM.TV) can do everything they can to destory the figurative theatre and dreams...but in the end we will always triumph. The 'theatre' to me represents an idea a foreign company can never take away. I dare to dream, do you?

I wouldn't have minded too much if Disney bought the Muppets and Jim hung around as a consultant. After all, at that point he had had a few commercial failures and he was bummed. So, why not keep the characters safe? I'd bet that with with Jim consulting, Disney would've made some GOOD Muppets projects for Disney themselves to follow. Unfortunately, we didn't get a chance for that to happen in time

I'm with Beaker; anything worth believing in is worth going crazy for, so I'll join him in his "fantasy."

Originally posted by sidcrowe
I'm with Beaker; anything worth believing in is worth going crazy for, so I'll join him in his "fantasy."

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Thanks man. But it is no fantasy..."I believe it is our destiny" as Morpheus says in the upcoming Matrix Reloaded film.

I speak as that 5 year old kid enamored with Muppet books, films, and tv. That's the kind of magic I want...no demand come back. I give a harsh middle finger to all this financial/buyout hoopla...you think the Muppet fan/casual fan out there gives a hoot about behind the scenes wrangling? Heck no.

...if Ive learned one thing in my 24 years, it is that no matter how bleak some things seem...there is always hope. I wish more people could see this.

Beaker, you have a beautiful mind....OH I HAD TO DO IT!!!!!!!! HAD TOO! THE EVILNESS MADE ME! i do believe in what you are saying....we all know it would be great if nobody reigned over the mupppets, but we all know that a few bummed out projects is all it took for the debts and those debts just got bigger....until help was needed, unfortunately a real life Bitterman got them (not just one a company run by 'em) and sidcrowe you are right too at the time that was pretty much JH's only option, but i am sure now it would be a differant story....it's almost weird that he died before he got a chance to sign the papers (and from what i've heard, Eisner pressured Brian to) weird as it is it was almost meant to be, as horrible as that sounds, i believe it to be true...

beaker i know that the muppets will always be the muppets in our hearts....they saved theirselves from one Bitterman, but there's a whole army out for them...and they might be able to dim the muppets, but they cannot extinguish them! us fans will keep them alive FOREVER!!! and no big bad company can change that! i do believe in your dream, and as bleak it may sound at times i know it will be a reality and if it isn't....well we just can't let that happen,can we?-Sarah

Here's my thing, and of course I will not understand what I'm about to say. I love the Muppets and have a lot of admiration for Jim Henson and the work he did when he was alive. But I do care a lot about the "business" side of things, 'cause that in the end plays a big part in the way creative things are done. Let's say the EM.TV deal in 2000, there was a lot of hope that with the outstanding $680 million being poured into the Henson Co., the sky was the limit with what the Muppets could do, especially with the announcement of the new Muppet Show or new episodes of "The Muppet Show," whatever that meant. Then, of course, a year later, it all went to heck and Henson's up for sale. With all the rumored suitors since March 2001--Viacom, AOL, HIT, Saban, Valentine, Classic Media, Entertainment Rights (whatever the freak they do), and of course Disney and Charles Rivkin himself--there has been a fair mix of optimism and worry for Henson/Muppet fans (at least for the hard-core ones who have access to Muppet Central) concerning what these parties will do to or for Henson.

Well I'd like to say screw all the corporate hooha and just cherish what Henson has done for us, I personally can't do just that. I've been a major Muppet fan only since '95, and while I have seen enough pre-90s Henson material to say they were better and just had this "thing" and certain mood in those days which makes me love the company, I've had to deal with a time of bad deals (ABC, Sony), failed investments (Odyssey, Kermit Channel) and just a time of corporate play that has hindered certain creative efforts.

While to honor the creative side is the primary basis of being a Muppet fan, the corporate side and all this talk of the EM.TV sale is very important too, 'cause where they go affects how future projects will be handled and how existing brands will be managed. Example: EM.TV. While Luke said they were doing all these good things with Henson in early-mid 2000 in the UK or wherever, but by mid-2001 Kermit's daddy had sold the 21-year-old Sesame characters (albeit to the company that actually makes the show) and the Crown Media stake was gone too, greatly diminishing the presence of classic Henson material that was shown on Odyssey. And, apparently, these articles SEEM to say that Henson's own home-grown Creature Shop is separately for sale, don't even want to talk about that.

Now Henson's caught up in this drama which could be the best thing ever or the worst thing ever (though that's a little exaggerated). If our beloved JHC indeed goes to Disney, the company could exploit the Muppets (which they need to be) through many of its divisions. More opportunity for merchandise, reruns of the classics from the 70s and 80s, new movies, attractions, and other things for us to watch and buy (and believe me I need more Henson stuff). Though who knows what the actual creative work (at least the Classic Muppets) would look like under the Mouse's ownership. What things would be like now if Jim didn't die and Disney owned his company, that's a question honestly no one could answer. But it's fun to try.

If Classic Media buys (or buys a half stake in) Henson, well, who knows? From what I've read, they own the Harvey characters, Lassie, Lamb Chop, Mr. Magoo, and others. From this company, it looks like they'll just own the Muppets for the sake of owning them and just name recognition, 'cause I don't know what major projects I've seen from these other characters in a while. But of course the Muppets are a more visible brand than the others, so again, who knows?

Entertainment Rights PLC? Moving on.

And, realistically, who knows what EM.TV will continue (along with Dean Valentine and his posse of investors) to do with Henson. How a 50.1/49.9% deal is different than a 50/50% deal, ask someone else? Do they, if the deal goes through, have the strengths to put Muppets and other Henson brands back in the public eye? Guess we'll find out.

What am I desperately attempting to say since this has been on my screen for the past three hours? While we can still look back and think of the simple days of just watching Muppet/Creature shows just waiting for those "geniuses" at Henson to make more uplifting stuff, I'd think we better watch EM.TV and its dealings very closely, because notice it or not, Henson (at least the Muppet part) has only STARTED to make a comeback with bigger projects. While the UK and other countries have been lucky with "Mopatop," "Hoobs," and some older stuff being played on several channels, the US only has "Bear," the soon-defunct "Farscape," and a gaggle of Sesame Streets. We're all lucky there's the Time Life videos, two of which I bought at Target somehow.

So, while it doesn't need to be the fan's primary concern, all the behind the scenes dealings do matter 'cause it will affect (especially when the company itself is getting bought and sold) what your favorite characters and TV shows are doing and how they will be treated. Unless, despite all its past achievements and recognition, Henson could end up another Harvey Entertainment Co...which by the way is now called Sunland Entertainment minus Casper and the other cartoons.